How to Apply for a Bank Loan in the Philippines

by Gily Tenorio on May 29, 2012

in Loans


Do you know how to apply for a bank loan in the Philippines? Or do you have any idea on the procedures that you should take? Don’t worry, in this article, I’ll give you the basic information and tips on the things you need to have and the actions that you need to take before applying for a bank loan in the Philippines.

So what is a loan? A loan is the act or process of borrowing money from an individual, bank or lending company. There are many different reasons why a person apply for a loan. The most common form of loans these days are housing loan, personal loan, car loan, business loan, and educational loan.

Each of the loans mentioned above has its own objectives or reasons why a person apply for it. For example, a housing loan is intended as a fund for the house construction of the applicant.

If you don’t have any idea on how to get a loan, here are some of the tips you should follow and know prior applying for a loan in a particular bank.

1. Compare the loan interest rates among the banks

I think this tip is the most important here in this list. You have to compare first the interest rate among the banks you are planning to apply for a loan. Then, choose the bank that charges the lowest interest for loans. A 0.01% difference in interest will have a big impact on your monthly payment so consider this one carefully.

Last year, I’m looking for a bank where I could apply for a housing loan. I searched the interest rates among the Philippine banks like BPI, BDO, Metrobank, PSBank and RCBC.

Maybe you’re thinking on how to do this. It is relatively easy to do. If you have an Internet at your home, you can visit the website of your prospect banks. I’m sure all information about loan application and interest rate is available there.

You can copy that info and paste it in a spreadsheet, you must do the same for other banks. In this way, you can easily find which bank offers the lowest interest for loans. In my experience in blogging about banks in the Philippines, I could say all have websites that you can go to look for the information that you might need for loan, deposit account, investment and many more about the bank.

2. Look for the documents and requirements in loan application

Another things that you should look for prior to loan application is the documents or requirements needed in the application. As what I have said earlier, you can find this by going to the website of the bank. Usually, all banks have a section on loans. There you can see the documents required for loan application.

Normally, the basic requirements when applying for a loan are two valid ID of the applicant, billing statement for the proof of address, marriage contract (married applicant), certificate of employment, and proof of income. More details on the requirements can be seen in the application form on the web page of the bank.

bank loan philippines

3. Take advantage of the online estimator for loan

Online estimator for loan is an online calculator that computes your monthly payment for a given loan amount and number of years for payment. It is a good tool to help you out and give you idea on how much you will need to pay each month. Of course, this is only an estimate so it can be higher and not lower because there are some added fees or charges that are not included in the online estimator.

When I tried to apply for a housing loan at BPI last year, I discovered this online estimator that immediately gave me an idea on the monthly payment. It is also good way for the bank because they can provide better information for their customers about the interest for a certain period.

4. Find a bank that is offering a special promo

There are many banks now offering a special promo especially on the housing loan. The promo they give is on the interest rate. Usually, when there’s a promo, the interest rate is much lower than the normal rate.

What I have noticed in the past is that almost all banks now are offering promos because they want to get more customers especially if it is a loan. I think all banks earn more money in providing loans to its customers than catering for deposit accounts.

Therefore, your goal is to find a bank that is offering a promo with the lowest interest rate possible. But I’m assuming that one bank cannot have it all. Another bank maybe the best for loan even though it is not the lowest interest simply because you already trusted that bank. In this case, a 1% difference may not be that big.

5. Ask your bank for a lower interest rate

As much as possible, you should apply for a loan in your current bank especially if you have already have network connections inside the bank or you have relatives that can help you. However, if you don’t have any of those, you can simply ask your bank for a lower interest rate.

I know some banks give lower interest for those customers that has been in the bank for many years or those customers that transacts with them in many zeros. I think if you have good relationship and transaction with the bank, you can try to negotiate for a lower interest.

I have a friend who are paying their monthly amortization for their house and lot in Union Bank. We had a chance to meet and talk for a while, and he said to me that his planning to ask for a lower interest for their loan or they will look for another bank that can give the interest they are asking.

So, as you can see, it is possible to do that. It may involve some negotiations and presenting the facts that you have.

Final Word

When applying for a bank loan, whether it is for housing, business, education or car, you should look first which bank can give you the lowest interest. Aside from that, make sure that the bank you are dealing with, is the one that you can trust and provides good customer service.


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About the Author:

GilGil Tenorio is a blogger, a husband, a father, and an active Christian. He likes playing guitar, C.S. Lewis, Plants and Zombies and NBA. Follow him at Facebook, Google+, YouTube and Twitter. Thanks!



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{ 1 comment… read it below or add one }

OFW loan June 4, 2012 at 03:19

True that getting loan from banks is the safest way to borrow money..However, nowadays, banks are so tight to approved the application. What if an emergency come along or your planning to go abroad and wanting a OFW LOAN..Aside from banks. many lending companies are open to help just be careful to those person who scammed.


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